Arroyo signs PERA law
By Lira Dalangin-Fernandez
INQUIRER.net
First Posted 11:43:00 08/22/2008
MANILA, Philippines -- President Gloria Macapagal-Arroyo has signed into law the Personal Equity and Retirement Account (PERA) bill in ceremonies in Malacañang Friday.
With the signing of the measure, the country's savings rate is expected to increase as it allows tax-free personal retirement accounts.
The bill aims to promote the culture of savings among Filipinos, particularly overseas workers, who are not members of either the Social Security System or the Government Service Insurance System.
Under the law, an individual can make a maximum contribution of P100,000 per year to his/her PERA account. For married individuals, contributions can be as high as P200,000, and for an OFW and his or her spouse, the maximum amount is P400,000.
Contributions should be invested in a qualified "PERA Investment Product," which may be a unit investment trust fund, mutual fund, annuity contract, insurance or pension products, deposit product, pre-need pension plan, shares of stocks, exchange-traded bonds, or any other investment product or outlet.
Contributors are entitled to an income tax credit equivalent to 5.0 percent of the total PERA contribution, according to the law.
Income from contributions is tax-exempt, it said.
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